The Chicago Board Options Exchange (CBOE) today issued the following statement from CBOE Chairman and CEO William J. Brodsky regarding the SEC emergency order banning short sales:
"The need for the policy intervention notwithstanding, it is difficult to comprehend the merits of a draconian measure that will result in the sudden and severe removal of liquidity from the marketplace at the same time that the government is taking unprecedented steps to preserve it.Investors rely on a deep and liquid options marketplace in which to safely hedge and to transfer risk in times of market turmoil, yet this action will severely compromise the ability of market makers to make markets.Liquidity in the affected stocks will suffer to the extent that market makers are hampered, and -- absent relief -- market makers will be hamstrung.The lack of relief for options market makers will have serious ramifications for the reliability of the options market and for the efficiency of our capital markets overall.We are especially concerned with the collateral damage to our customers, which, while unintended, will be no less serious," said William J. Brodsky, CBOE Chairman and CEO.
